$13.$ Pierce$-$Paul, Inc. $($PPI$)"$Stasia Acosta, marketing manager for Pierce$-$Paul, Ine., must decide whether she should permit her largest customer to buy some of PPT$\text{'}$s commonly used file folders under the customer's brand rather than PPI's own FILEX brand. She is afraid that if she refuses, this customer$-$Business Center, Ine.$-$will go to another file folder producer and PPI will lose this business.Business Center, Ine, is a major distributor of office supplies and has already managed to put its own brand on more than $45$ high$-$sales$-$volume office supply products. It distributes these products$-$as well as the branded products of many manufacturers$-$through its nationwide distribution network, which includes $150$ retail stores. Now Lance Richardson, vice president of marketing for Business Center, is seeking a line of file folders similar in quality to PPI's FILEX brand, which now has more than $60$ percent of the market.This is not the first time that Business Center has asked PPI to produce a file folder line for Business Center. On both previous occasions, Stasia turned down the requests and Business Center continued to buy, In fact, Business Center not only continued to buy the file folders but also the rest of PPI's product lines. And total sales continued to grow as Business Center built new stores, Business Center accounts for about $30$ percent of Stasia Acosta's business. And FILEX brand file folders account for about $35$ percent of this volume,In the past, PPI consistently refused such dealerbranding requests as a matter of corporate policy. This policy was set some years ago because of a desire $($I$)$ to avoid excessive dependence on any one customer and $(2)$ to sell its own brands so that its success is dependent on the quality of its products rather than just a low price. The policy developed from a concern that if it started making products under other customers' brands, those customers could shop around for a low price and the business would be very fickle. At the time that the policy was set, Stasia realized that it might cost PPI some business. But it felt wise, nevertheless, to be better able to control the firm's future.PPI has been in business $28$ years and now has a sales volume of $5-40$ million. Its primary products are fle folders, fle markers and. labels, and a variety of indexing systems. PPI offers such a wide range of size, color, and type that no competitor can match it in its part of the market. About $40$ percent of PPl$\text{'}$s file folder business is in specialized lines such as files for oversized blueprint and engineer drawings: seethrough files for medical markets; and greaseproof and waterproof files for marine, oil field, and other hazardous environmental markets. PPI's competitors are mostly small paper converters. But excess capacity in the industry is substantial, and these converters are always hungry for orders and willing to cut prices. Furthermore, the raw materials for the FILEX line of file folders are readily available.